If a Facility Has Costs of $100,000 Per Year and 20,000

question 55

Multiple Choice

If a facility has costs of $100,000 per year and 20,000 square metres,and if 19,000 square metres are absorbed by the value streams,what happens to the unabsorbed cost of the remaining 1,000 metres?

• A)The cost is allocated to all the value streams based on proportionate square foot usage.
• B)The cost is assigned to all value streams equally.
• C)The cost is absorbed by the largest value stream.
• D)The cost is deducted from revenue as a separate item.

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